Basic Taxation
WHAT IS TAX?
“ compulsory exaction of money by public authority for public purposes enforceable by law” (An Australian case)
“…part of our earnings is contributed to the Government to enable them to meet expenditures for the benefit of the people, such as the construction of roads, schools, hospitals and undertaking other development projects” (Tax Nasional 2001).
TYPES OF TAXES
Direct Taxes
Indirect Taxes
– Income tax
– Stamp duty
– Sales tax
– Service tax
Direct taxes
Indirect tax
Taxes paid ______________ to the Revenue authorities by the taxpayer.
A third party will collect the taxes on their behalf and then forward the tax collected to the Revenue authorities.
TAXES AS GOVERNMENT REVENUE
Tax revenue constitutes more than 80% of the total nation revenue;
Direct tax 56% of the revenue and indirect 25% and others non-tax revenue.
Tax laws have been designed to ensure that source of revenue for the nation.
SOURCES OF REVENUE LAW
Statute laws
law enacted by Parliament eg Income Tax Act, 1967
Case laws
law created by the decisions of courts
eg Pan Century Edible Oil vs IRB
Informal laws
– Inland Revenue Board’s guidelines (Public Rulings).
IRB’s website: www.hasil.org.my
TAX ADMINISTRATION
: overall control of Malaysian taxation
Responsible for the assessment and collection of direct (both personal and corporate taxes) and is headed by the Director General of Inland